Apple may have made a boatload of money in the July - September 2018 quarter, managing to considerably boost its share of USA smartphone sales before the iPhone XR was even released, but it's not all rosy in the Cupertino camp.
Some lauded the mid-range handset for its iPhone XS-caliber performance, which is strategically available for a fraction of the price. Weaker-than-expected demand means the company will not receive iPhone XR orders this peak season.
The iPhone XR also managed to get glowing reviews, both from the critics and users, but it is still one of the pricier models, which may be affecting the smartphone demand.
Preparing for holiday demand, Apple had reportedly contracted a third smaller iPhone assembler to assist.
Japanese news service Nikkei reported Monday that Apple has asked its Chinese suppliers including Foxconn to halt plans for additional production lines of the newly released iPhone XR, whose price starts at $749 instead of $999 and up for the other new iPhones.
In a unusual plot twist, Nikkei went on to cite Apple's decision to shift its focus towards "requesting more of the older iPhone 8 and iPhone 8 Plus models", which are about 20% cheaper than the iPhone XR ($599 vs. $749 base price).
"For the Foxconn side, it first prepared almost 60 assembly lines for Apple's XR model, but recently uses only around 45 production lines as its top customer said it does not need to manufacture that many by now", a source told Nikkei.
The end of reporting on unit sales comes as Apple has been seeing little growth in units in its iPhone business. Whether things change or not, that remain to be seen. Ives wrote. "To this point, we continue to believe despite extremely poor communication and what should have been a much more phased approach toward taking away long standing unit metrics the Street has relied upon, that Cook & Co. decided now was the time to rip off the Band Aid and stop giving these quarterly numbers heading into another major iPhone product cycle".
Before we dive into this, I want to recommend caution where Apple and iPhones are concerned.
Apple's Asian suppliers tanked after a bruising day of trading after a negative report about the iPhone XR sent Apple tumbling.
Apple on Monday did not respond to a Reuters request for comment. Given the disparity between what we saw being said about the iPhone X past year and its 12-month performance, some caution is clearly warranted.